Robert Graham Center Research

Patients Bear Cost of 'Me Too' Drugs, Study Finds

August 09, 2016 02:36 pm Michael Laff

Pharmaceutical companies may say their name-brand medications are better than generic alternatives, but when it comes time to pay the bill, these drugs cost patients a lot more, according to a recent study conducted by the Robert Graham Center for Policy Studies in Family Medicine and Primary Care.

[Physician holding card that reads Generic Drugs]

Patients are not paying just a little more for brand-name drugs. They're paying a lot more. Medicare Part D beneficiaries paid an average of 10.5 times more in copayments for Nexium (esomeprazole magnesium) and Crestor (rosuvastatin calcium) compared with their generic therapeutic substitutions (omeprazole and atorvastatin, respectively) in 2013, according to research published in the July issue of Health Affairs.(content.healthaffairs.org)

Researchers focused on the acid reflux medication Nexium and the cholesterol medication Crestor because they landed on a list of the 10 drugs that cost Part D the most in 2013. Although the top 10 drugs ranked by total claims were generics, the top 10 ranked by total cost were all brand-name drugs, the study authors wrote.

To compete against less expensive generic drugs, pharmaceutical companies introduce brand-name medications with nearly identical uses that carry a higher price tag, earning them the nickname "me too" drugs. Researchers calculated that prescribing the therapeutic generic equivalent in place of Nexium would have saved $870 million in 2013; doing the same for Crestor would have saved $1.2 billion.

Story Highlights
  • A study published in the July issue of Health Affairs calculated that prescribing generic therapeutic substitutions instead of Nexium and Crestor for Medicare Part D beneficiaries could have saved $870 million in the case of Nexium and $1.2 billion in the case of Crestor.
  • Medicare Part D spending on prescription drugs increased from $62 billion in 2007 to $103 billion 2013 even while the dispensing rate for generic drugs increased from 65 percent to 76 percent.
  • One study author said more transparency, easy access to prescription drug costs and improved communication could help.

Thirty-six million individuals were enrolled in Medicare Part D in 2013. The program's spending on prescription drugs increased from $62 billion in 2007 to $103 billion 2013 even while the dispensing rate for generic drugs increased from 65 percent to 76 percent.

"If we continue to prescribe this way, it's not great for the patient and not great for reducing health care costs," Nicole Gastala, M.D., a family physician at Primary Health Care in Marshalltown, Iowa, who was one of the study authors, told AAFP News.

During her residency at the University of Iowa Health Care, Gastala said faculty members pushed residents to use generic drugs rather than their brand-name counterparts. Now she works at a federally qualified health center where physicians prescribe generics as a first option whenever possible.

"The pharmaceutical industry develops some wonderful drugs, but choosing a branded 'me too' medication over an equally effective generic medication can drive up costs with little added benefit," she said.

Health plans may place certain brand-name drugs on their "preferred" lists after pharmaceutical companies offer insurers rebates to encourage use of these drugs rather than more expensive brand-name competitors. These rebates, however, are not passed on to patients, and these preferred brand-name drugs carry higher copayments than do generic medications, according to Gastala. In fact, researchers found that patients paid an average of 10.5 times more ($42 compared to $4) in copayments for the drugs they studied.

Prescribing lower-cost drugs whenever possible is one element of the Choosing Wisely campaign to reduce wasteful spending in health care, but the number of different health plans and drugs makes comparing costs difficult for physicians.

"There are hundreds of different drug plans," Gastala said. "A physician could prescribe the same medication to 10 different patients in one day and the cost could be different for each patient. We rely on patient feedback or a call from the pharmacy that a medication is not within their budget."

One solution the authors suggest is adopting an Australian model that prohibits the addition of "me too" drugs to formularies unless they demonstrate improved outcomes or lower costs. Another option would be to mandate a step-therapy approach in which physicians prescribe generics first and move to brand-name medications only if a patient demonstrates intolerance to the generic drug.

"More transparency, easy access to prescription drug costs and improved communication would be helpful," Gastala said. "The goal should be to work collaboratively with patients, insurers and pharmacies to prescribe an effective medication at the best cost."

Related AAFP News Coverage
CMS Addresses Senate Concerns on Part B Payment Proposal
(7/5/2016)

Rising Part D Drug Prices Adversely Affect Physicians, Patients
AAFP Presses CMS to Find Solutions

(4/15/2016)


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